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Thursday, 3 August 2017

QUARTZ Africa/Khanya Mtshali: The world’s top mobile money operator will launch an e-commerce store next year

QUARTZ Africa

JOINING THE REVOLUTION

The world’s top mobile money operator will launch an e-commerce store next year

By Khanya Mtshali
3 hours ago Quartz africa

The portal, dubbed Masoko, will offer a selection of products ranging from electronics, makeup, and food and provide a space for merchants to trade goods on social media sites like Facebook and Instagram, according to Safaricom executives who spoke to Bloomberg, The company is in the process of testing the portal before it goes live at the end of March 2018.

Kenya has experienced an e-commerce boom thanks to a high number of mobile internet users partly driven by the growing availability of affordable smartphones. At the end of March, the value of mobile commerce transactions was just over $6 billion, according to the Kenyan communications regulator. The East African country had over 40 million internet users as of Mar. 31. These factors have produced a competitive market for e-commerce sites like Kilimall International, Pigiame, and OLX.

The key advantage for Safaricom in e-commerce will be its hugely successful mobile money platform, M-Pesa. It means Kenya’s No.1 phone company already has significant consumer insight and experience with operating a digital payments platform. One of the key challenges with building e-commerce operations in African countries has been that credit card penetration is still very low relative to more advanced economies. Regional e-commerce operators like Jumia and Nigeria’s Konga have invested in developing proprietary payments platforms to help overcome that challenge.

M-Pesa already enables almost 30 million people (mostly in Kenya) to pay for everyday goods and services, access loans, and send money all over the world. Around $28 billion flowed through it in 2015, equivalent to around 44% of Kenya’s GDP that year. The service has spread to 10 countries, including Albania, Egypt, Romania, Lesotho, and Tanzania. Its success at the forefront of the disruption of cash usage has helped support a local technology startup scene in Kenya and attracted international partners, making Nairobi one of Africa’s leading tech hubs.

Safaricom CEO, Bob Collymore, said merchants would go through a vetting process before gaining access to Masoko. The mobile operator will also coordinate with logistics companies to reduce delivery times on goods given the lack of a national addressing system.

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